How Labels And Artists Divvy Up Your Dollar Online 513
Subliminal Fusion writes "Business 2.0 has an article that breaks down where that $1 goes when you buy a song from iTunes or other online music services. Key figures: the site takes .40, the labels take .30 and the artists get a measly 12 cents for each download."
Re:Interesting math... (Score:2, Informative)
Re:Interesting math... (Score:1, Informative)
Same as album sales! (Score:5, Informative)
And thats after paying for promotion. Depressing stuff.
who's the dumbass? (Score:2, Informative)
Re:So where's the credit card companies chunk? (Score:1, Informative)
In their chart, the cut for apple includes credit card usage -- because that's apple's responsibility to do. Seriously, your question is like asking "who pays for the recording? Recording studios get expensive!!" It's not like the credit card company is a partner in the music store. The chart divides up between the partners and those partners have certain responsibilities like paying the processing fees or the recording fees.
Re:So where's the credit card companies chunk? (Score:3, Informative)
Generally, credit card fees come out of the retailer's piece of the pie. How do they afford it? We're only talking about 2-4%. Yes, 2-4%. What about the transaction fees? While many internet merchants do pay per transaction fees for credit cards, this is not a "requirement" of the deal. The CC companies have and do setup some accounts on a strictly percentage basis. I'm sure it's particularly easy to negotiate this when you're Apple and not joescomputershack.com... but it's not particularly a "special deal'.
Have doubt? Try googling for "merchant account 'no per transaction'".
-jbn
Seems about right (Score:3, Informative)
Anyway, 12 cents a song for a 12 track cd = $1.44.
I believe most artists make anywhere from $.75 to $1.50 per cd depending on the popularity of the artist. Yep you read that right.
Infact they get a bigger share because the RIAA does not have to go through a greedy retailer which charges $5-7 per cd, and no shipping or manufactoring costs are considered. Its the retailers and not the RIAA who make the majority of the outrageous prices. If the RIAA sells a cd for $11.99, the retailer will bump up the price to $18.99 and pocket the difference. Infact I believe they already do this. They only discount if the product does not sell well.
That is unless the artist is really big and has their own record label after their contract expires. That is difficult because most contracts require that the RIAA own the first 5-6 cd's. Mostly the big artists can afford to outsource to a small or indie label after many hits when the contract runs out. Metallica for example does have such a deal which explains why they sued Napster. They have alot more vested interest and their newer albums make a shitload more money for them. They do not have to have a huge record label to market for them.
Re:Isn't that a step up? (Score:5, Informative)
the artists get a measly 12 cents for each download.
From all the articles there have been about the artists under the RIAA, 12% is a hell of a lot better than the cut they get normally. Sure, it's measly, but it's probably a step up. Here's to hoping it'll increase.
According to one of the best articles written on the subject [janisian.com], it's a big step up.Re:it should be 50/50 (Score:5, Informative)
the site takes
the labels take
the labels take another 12 cents from the artist's share to recoup "production advances" and "independent promotion"
The artist gets shit until they've sold the first few million CD's. Only then, they get to keep their 12c.
Re:Same as album sales! (Score:3, Informative)
Re:Mesaly? (Score:4, Informative)
Re:Artists should skip the label part! (Score:4, Informative)
You're fogetting... (Score:5, Informative)
Another thing to remember is that Itunes is an unprecidented success in the industry. Say what you will about it, but they're still only targeting 2% of the computing population...
Re:how is it (Score:5, Informative)
Interesting question. I was wondering that myself.
Not many people outside the music industry are aware that retail sales are the only revenue stream. For one thing, there's something called mechanical royalties, a fee of 7.5 cents per song per unit that's paid to the songwriter (not the performer, unless they are the same person or persons). BTW, the term mechanical originally referred to player piano rolls, and goes back over a century.
If a band releases an album of all "cover" songs, all the mechanical royalties go to the songwriters.
There's also performance royalties, money paid to the songwriter from radio and television airplay (as well as jukebox placements and clubs that employ cover bands). The recent controversy surrounding streaming webcasts involved these. Performance royalties are administered by ASCAP, BMI, and SECAM, organizations that collect fees from radio and television stations (and clubs and jukebox vendors) and disburse these monies to songwriters according to a formula based on the number of plays multiplied by the potential number of listeners.
Other revenue streams include synchronization rights (the use of musical works in a movie soundtrack) and transcription royalties (use of musical works in advertisements).
For all but the most popular bands and songwriters, these royalty payments don't amount to much, but even a "one hit wonder" might see a jackpot if their song hits the Top 40 or ends up in a movie or a television commercial.
The canonical/apocryphal royalty success story is that of Paul Anka, who wrote the theme for Johnny Carson's Tonight Show, and earned over $700 each week from performance royalties simply by having that tune played on every NBC affiliate in the country five nights each week.
k.
Re:You're fogetting... (Score:5, Informative)
Re:Measly 12%? (Score:2, Informative)
Re:So where's the credit card companies chunk? (Score:5, Informative)
Another useful fact is that the merchant contract prevents the store from requiring seperate ID beyond the card itself. However, they are allowed to ask for ID, they just aren't allowed to require ID unless they have reason to believe that the transaction is fraudulent (note, blanket policy of requiring ID from all CC users is not sufficient, that is the equivalent of saying, "if you shop at our store, we think you are trying to commit fraud" and thus is not acceptable under their merchant contract).
Some people claim that these requirements aren't fair and that in the case of minimum purchase requirements, the vendor loses money on the transaction and that in the case of not being able to require ID the vendor has to make good on fraudulent charges either directly through chargebacks or indirectly through increased fees for being a more risky business. Well, tough noogies, the store signed the contract with these terms, they have the choice of either not accepting credit cards or accepting them with the terms offered. The reason these terms are in all the contracts is that the CC companies wish to be as easy to use as cash - cash does not require an ID, and there is no minimum purchase to use cash. either.
So, stand up for your rights. Most people pay very dearly for them with the exorbitant interest rates that the CC companies charge, at least you should be able to get the benefit of the few actual contractual terms that are in your favor.
Ripoff! It's as worse as CDs. (Score:2, Informative)
This is as worse as CD distribution by the record labels. Apple should've striked deals directly with the artists. Hm, if the artists got say .60, then they'd have to sell 5 times as little as they sell now to get the same amount of money. This is bloody ripoff.
On the other hand it also costs as much as regular CDs. You get like ~10-15 songs on a regular CD, which is around $15. If you download 15 songs from Apple, you also end up spending $15, as much as you spent for the CD. Maybe a little cheaper because a CD doesn't always have 15 songs on it. But still.
Ripoff! First, the artists are ripped off, then you, the consumer. I mean it's somehow fair for Apple to get .40 out of it, but the record labels and the publisher? Give me a break!
The record labels are the media intrustry's dinosaurs. And Dinosaurs will die.
Re:Seems about right (Score:3, Informative)
Metallica are distributed by Elektra in North America (and a few Polygram (which is Vivendi, IIRC) imprints in Europe and Sony in Japan). However, Metallica are effectively indies distributed by a major label now.
Metallica is legally E/M Ventures, which is a corporation set up about ten years ago to own and manage all Metallica intellectual property, as well as manage the band's affairs. It's share breakdown is basically, IIRC:
Every dollar Metallica earns goes through that corporation and is counted as revenue. Expenses such as touring, office expenses (for running the fan club), promotion, record production, etc. are deducted, and a percentage of the profits and retained earnings of the corporation are paid out as dividends (I imagine Lars, James, Kirk, and Rob are somewhat in favor of making dividends tax-free, as that would basically make 100% of their incomes tax-free!).
E/M Ventures maintains a manufacturing and distribution contract with Elektra, with a 50/50 split of wholesale prices (all this is basically risk-free money for Elektra), . Elektra is legally obligated to distribute any and all material Metallica chooses to have distributed in North America. And since, between them, any three members of the band have voting control of the corporation, what they say goes; if the band wants to release an album full of bluegrass, Elektra is obligated to send it to stores (with Elektra getting a gross profit of about $2.00 per unit, not counting their E/M dividends).
Elektra took this deal because it gave them a huge cut of the non-recording business of Metallica, which is virtually incomparable in this era. When Metallica tours, they are their own promoters. They rent at a flat rate the stadium or amphitheatre or arena. They pay the opening acts. Essentially all the risk is taken by E/M Ventures, and the massive profits go to E/M. The same is true for licensing of the Metallica name and logo.
Re:Royalties -- You Are Close (Score:4, Informative)
SLRP: suggested retail list price minus 20% for packaging. ex: CD retails at $14.99, minus 20% for the packaging ($3.00), SLRP is $11.99.
New artists signing with an independent label get between 9% to 13% of the SLRP.
New artists signing with a major label get 12% to 14% of the SLRP
Midlevel artists get 15% to 16% of the SLRP
Superstars get 18% to 20%+ of the SLRP.
Re:Artists should skip the label part! (Score:5, Informative)
Apple iTunes is paying the label 65 cents per download, (as reported many places). Of that we can pass almost all of it to the artist, since we're not a record label, and have no up-front expenses.
You can see my notes on Apple's meeting with independent record labels here (pt 1) [cdbaby.org] and here (pt 2) [gnutellanews.com].
Completely Incorrect - One example here (Score:1, Informative)
Re:Artists should skip the label part! (Score:3, Informative)
It's possible to get noticed and get publicity without labels, yes, but it's not easy, and if it flops can easily bankrupt a group (and their families).
Re:So where's the credit card companies chunk? (Score:3, Informative)
Just to provide a URL so people can have something to point to (since I wasn't aware it was against credit cards rules to set minimum purchase prices)--
http://www.corporate.visa.com/footer/faqs.shtml#7 [visa.com]
Make sure to let it scroll down automatically, or click on the FAQ entry for minimum purchase to use a Visa card.
Re:So where's the credit card companies chunk? (Score:3, Informative)
And here's one for Master Card--
http://global.mastercard.com/hk/faq.html#c_cust_se rv [mastercard.com]
Same as the Visa, be sure to let it load, or just do a text search for "minimum".